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3 Common Mistakes When Planning for a Disabled Family Member

Don't make these 3 costly mistakes when planning for your disabled family member

There are 58 million Americans five years of age or older that are identified as special needs, making them the largest single minority in this country. The majority of federal and state benefits available to help persons with disabilities are needs-based, meaning income and assets are strictly limited and can often by misinterpreted, resulting in costly mistakes. If you have a disabled family member or loved one, here are some common errors that you should be aware of, so that they can be avoided.

3 Mistakes to Avoid When Planning for a Disabled Family Member

1.  Unintentionally disinheriting the disabled family member

One of the most common mistakes a parent or loved one makes is disinheriting their family member with special needs. The reason is often because the family believes other siblings will step in and take care of the disabled family member. However, this can lead to numerous problems, especially if the non-disabled sibling gets sued, divorced, or otherwise loses the money left to them. |

2. Not protecting assets in a properly drafted trust

Another common mistake is failing to create a properly drafted trust to qualify the disabled family member for government benefits than can help pay for costly medical and/or living expenses. Qualifications for government benefits like Supplemental Security Income (SSI) or Medicaid dictate that the disabled individual has no more than $2,000 in assets. If your disabled loved one has assets above this threshold, they will have to be “spent down” to qualify for government assistance or otherwise protected in a properly drafted trust.

3. Gifts that accidentally disqualify the disabled person from benefits

Well-meaning friends and extended family may not understand the complexity of disability benefits and give a disabled loved one money or assets that would disqualify them for state and federal benefits. It is especially difficult if the disabled person already has benefits and becomes disqualified because the “needs based” review discovered additional funding putting them over the $2,000 asset limit. It is best to avoid this situation as it is a big hassle to re-qualify your dependent for government assistance.

Be wary of crowdfunding sites like GoFundMe to benefit your loved one with special needs. In the absence of qualified legal planning, these donations can disqualify SSI, Medicaid, food stamps and section 8 housing. A well-meaning fund campaign could cut the benefits of a disabled person and make their living circumstances worse than before.


We are here to help.

What to do? Plan ahead! There are several ways to provide for your special needs dependent and stay within government guidelines for additional benefits. One of the best ways is to establish a special needs trust that has the specific purpose of supplementing federal and state assistance programs. By doing so, a disabled loved one can benefit from government programs, and have additional money to supplement what those programs provide.

There are strict rules when it comes to creating special needs trusts for a disabled family member. There are also restrictions on what the money can be used for. At McDonald Law Firm, we can help you determine what type of trust is best based on you and your loved one’s particular circumstances. Contact Andre O. McDonald, a knowledgeable Howard County estate planning, special needs planning, Medicaid planning and veterans pension planning attorney a call, at (443) 741-1088, at your convenience to set up a time to discuss your situation further.

DISCLAIMER: THE INFORMATION POSTED ON THIS BLOG IS INTENDED FOR EDUCATIONAL PURPOSES ONLY AND IS NOT INTENDED TO CONVEY LEGAL OR TAX ADVICE.

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For help with estate planning, special needs planning, elder law or Veteran's Pension Planning needs throughout Howard, Montgomery, Prince George’s, Anne Arundel, and Baltimore County; and Baltimore City, contact McDonald Law Firm, LLC.

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